Initiative targets property taxes

BOISE – A ballot initiative to sharply limit property taxes in Idaho was filed with the secretary of state’s office on Friday, the first step toward qualifying the measure for the November 2006 ballot.

“Maybe this could be considered as Idaho’s tea party – we are gonna get some representation with our taxes,” said Chuck Cline, chairman of Idaho Property Tax Reform.

Sen. Shawn Keough, R-Sandpoint, co-chairwoman of a special legislative committee that’s holding hearings around the state on property taxes, said, “I’m not surprised, given what we heard in Sandpoint, Coeur d’Alene and Lewiston. People are very angry about their valuations going up and people are very angry about property taxes going up in some cases.”

Keough said individual legislators have been trying to provide relief for homeowners, but haven’t been able to get their proposals out of the House tax committee. “The bottleneck in the House Revenue and Taxation Committee has increased the average person’s frustration, and they’re utilizing their power to try to bring about change,” Keough said. “I think that’s appropriate. That’s what our system is all about.”

Cline, a former Nez Perce County commissioner from Orofino, made a last-minute change in his initiative. Initially, his group wanted to limit taxes to 1 percent of value, and limit value increases to 2 percent a year – both of which could be difficult to implement with Idaho’s tax system and constitutional requirements. In its final form, the initiative limits value increases to 2 percent every five years.

“We got to looking at that, and it doesn’t take long for that to accelerate out of proportion,” Cline said.

The initiative would freeze property values at 2004 levels, plus the small increases; when property sells, it would be revalued at the sales price.

The lengthy, complicated initiative – it was 72 pages as filed – contains a wide array of changes in Idaho’s tax laws. Among them:

“It eliminates the “50-50” homeowner’s exemption, which now exempts 50 percent of the value of improvements, up to $50,000, from tax for an owner-occupied home.

“It requires what it calls “Truth in Transaction,” requiring the immediate reporting of the full sales price for any property sale, construction or exchange. Failing to report or falsifying the information would be a felony punishable by five years in prison.

“School emergency fund levies would require a two-thirds vote; they now don’t require a vote.

“All taxes on personal property would be eliminated.

The measure now goes to the Idaho attorney general for a review. The attorney general could point out technical problems with the initiative, but his review is advisory. Once he’s issued his certificate of review, the sponsors have the option to amend their measure, and then seek a ballot title from the attorney general. Once that’s issued, they can begin gathering signatures.

They would have to collect 47,881 valid signatures by next April 30 to qualify the initiative for the November 2006 ballot.

Cline said his group doesn’t plan to use any paid signature-gatherers, and instead will focus on mobilizing groups around the state to volunteer to circulate the petitions.

Idaho Property Tax Reform also is starting a fundraising effort, he said, just to pay for the cost of printing up the lengthy packets with the initiative and petitions.

“We’ve gotta gather about 65,000 signatures to make sure we have the 48,000,” Cline said.

Idaho voters in 1978 approved a One Percent Initiative that sought to limit taxes to 1 percent of value, but it wasn’t workable with Idaho’s constitution and tax system, and the state Legislature amended it to instead impose freezes, then caps, on local government budgets. Four years later, voters enacted the 50-50 homeowner’s exemption in another initiative. That exemption has remained unchanged, and never has been adjusted for inflation.

Cline’s initiative would eliminate the remaining 3 percent budget cap in addition to the homeowner’s exemption.